IPOs From Budding Businesses Like Lyft and Uber Could Affect Bitcoin In A Positive Way
Lyft, the second biggest Uber-like platform in the world, is ready to go public. The move was speculated in Wall Street for a long time now and it looks like, after half a decade of private funding rounds, the company is ready for this new big step.
But what has this to do with cryptos at all, you might ask? Well, a lot, actually, as some people have a theory that the influx of huge companies going public via Initial Public Offerings (IPOs) could affect the crypto market in a huge way.
Could Silicon Valley’s Giants Going Public Affect The Crypto Market?
First of all, we have to look at what was called by the Wall Street Journal recently as the IPO Frenzy. You may remember the Initial Coin Offering (ICO) Craze from 2017 and that is pretty much the same thing with a major difference: these are really big companies.
While most companies who benefitted from the ICO craze in 2017 and 2018 were unknown, we are talking about names like Uber (worth $72 billion USD), Pinterest (worth $12.3 billion USD), Airbnb (worth $31 billion) and others here. These are not small crypto startups, they are some of the most powerful companies in the world.
With Lyft going public, the obvious movement that we can see now is that some of these other companies might also look at the idea and want to do it. There are rumors that all these companies might be opening up their stocks.
This means that these companies will see a huge influx of capital and not only that, but their investors will probably also see it, as the price of the shares will most likely go up. The money will flow like crazy and where can these investors invest after they are even richer? If you said crypto, bingo.
The idea came from Barry Silbert, which recently talked about the subject on Twitter. Silbert is the head of Digital Currency Group and he knows that several investors which will back these companies have serious stakes in crypto.
Billions of dollars in private company stock is becoming liquid via IPOs this year. The crypto asset class is going to be a huge beneficiary
— Barry Silbert (@barrysilbert) March 29, 2019
For instance, Andreessen Horowitz, from the a16z fund, is a major crypto investor and got Lyft shares from $4.25 USD each several years ago. Now, these shares will be sold at $77 USD in the public market. He also invested in Pinterest, which is also rumored to go public this year.
Crypto May Not Be So Positively Affected, Arthur Hayes Believes
Nobody is so enthusiastically confident, obviously. Arthur Hayes, considered a prominent crypto bull, is not so convinced at all. He commented on Silbert’s conjecture and affirmed that there is, in fact, a considerable overlap between major crypto investors and major Wall Street investors.
He believes that most investors will be afraid of investing in crypto because of what happened last year and that this industry will be the last one to “feel the love”, as there are some ways to make a quick buck easier than crypto at the moment.
Hayes is very bullish on Bitcoin this year and he believes that the token may rise to $10,000 USD or more again until the end of the year, but he simply is not believing that institutional investors using money from IPOs will be the cause of the next bull run.